If economies of scale exist for a particular production relationship, long-run average costs will
a. rise.
b. fall.
c. first rise and then fall.
d. be unaffected since there is no direct relationship between the two.
b
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Under fiscal stabilization policy in the New Keynesian model, after a positive shock to output,
A) the government increases expenditures and the central bank increases the money supply. B) the government increases expenditures and the central bank decreases the money supply. C) the government decreases expenditures and the central bank increases the money supply. D) the government decreases expenditures and the central bank decreases the money supply.
The Bretton Woods system:
a. allowed for market-determined exchange rates. b. ended the use of the gold standard in all participating countries. c. led to a dramatic increase in the U.S. balance of payments deficit. d. resulted in the rapid increase of the U.S. gold supply in the 1960s. e. All of the above.
Ronald Reagan’s presidency could be characterized as a period of
A. passive monetary policy. B. passive fiscal policy. C. active fiscal policy. D. active regulatory policy.
When the Fed increases the reserve requirement, it:
A. expands the money supply because banks have more available to lend. B. contracts the money supply because banks have less available to lend. C. contracts the money supply because banks have more available to lend. D. expands the money supply because banks have less available to lend.